U.S. Consumer Confidence is Seeing Some Improvement as Gasoline Prices Decline from Their All-Time Highs in June

Recap:  Oil futures bounced off of seven month lows after a report shows U.S. consumer confidence is seeing some improvement as gasoline prices decline from their all-time highs in June. Oil prices also recovered as traders reacted to Russia’s plans to reduce OPEC+ production by 1 million barrels per day at the next meeting. A drop in the U.S. dollar added to the mix. The Conference Board Consumer Confidence Index increased in September for the second consecutive month to 108, which is up from 103.6 in August and beats a WSJ survey that was forecasting 104.5, while the nationwide average gas price stands at $3.75 a gallon, well below the June 14 peak of $5.02. WTI for November delivery gained $1.79 per barrel, or 2.33% to $78.50. Brent Crude for November delivery gained $2.21 per barrel, or 2.63% to $86.27. October RBOB gained 10.89 cents per gallon, or 4.57% to $2.4931, while ULSD for October delivery gained 13.08 cents per gallon, or 4.18% to $3.2599.

Technical Analysis:  After plunging to a nine-month low the previous session, oil prices are rebounding, supported by supply curbs in the U.S. Gulf of Mexico due to rapidly approaching Hurricane Ian. WTI bounced off of support at $76.50 as it tried to recapture the $80 level. Meanwhile, there are reports circulating that the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, may take action to stem the drop in prices by cutting supply. The group meets to set policy on October 5. It remains to be seen whether this attempt will be successful amid recession fears. A sustained push above $80 will most certainly attract buyers and have the potential of pushing WTI back toward $85. RSI remains in the moderate territory, so there is plenty of room to gain downside momentum in case the right catalysts emerge. Any signs of exhaustion will be met with renewed selling. A break below support set at $75 could provide enough momentum to push this market toward $70.

Fundamental News: BP said Tuesday afternoon that it would be redeploying offshore personnel to its Na Kika and Thunder Horse platforms after determining conditions were safe for the return as it sees Hurricane Ian is no longer poses a risk to its Gulf of Mexico assets.

The U.S. Bureau of Safety and Environmental Enforcement reported this afternoon that some 190,358 b/d offshore Gulf of Mexico oil productiopn had been shut in on Tuesday ahead of the approach of Hurricane Ian. Some 184 million cf/d of natural gas production had also been shut in.

A CGT union official said strike action has stopped refined products from leaving three of TotalEnergies' refineries and one fuel storage depot in France. CGT union delegate, Thierry Defresne, said no product is leaving TotalEnergies’ 240,000 bpd Gonfreville oil refinery, the 119,000 bpd Feyzin oil refinery, and its La Mede biorefinery. Product transport from the Cote d’Opale fuel storage depots near Dunkirk has also stopped. The Feyzin oil refinery is currently offline. Workers are striking across all of TotalEnergies’ platforms except for the 230,000 bpd Donges refinery. The strike is expected to continue until September 29th.

Early Market Call - as of 8:20 AM EDT

WTI - November $79.94 Up $1.42

RBOB - October $2.5212 Up $0.0286

HO - October $3.3185 Up 0.0599

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